Abu Dhabi hotel revenues drop in May

abu dhabi - Establishments significantly reduced overhead and labour costs to offset dip in revenue

Hotel revenues dipped in Abu Dhabi in May due to a decline in food and beverages as well as a drop in conference and banqueting business, says a latest report.

"In addition to a 3.7 per cent drop in revenue per available room, a decrease of 11.1 per cent in food and beverage as well as conference and banqueting by 25.4 per cent on a per available room basis, contributed to a 7.8 per cent decline in total revenue per available room at hotels in the UAE capital in May," HotStat said in its latest hospitality numbers.

It said despite significantly reducing both overhead and labour costs, hotels in Abu Dhabi were unable to offset the decline in revenue across the major operating departments this month and as a result year-on-year profit per room dropped by 6.9 per cent.

While savings of 8.5 per cent were made in labour and 4.8 per cent in overhead costs, hotels in Abu Dhabi suffered further year-on-year declines in profit per room in 2016. Year-to-date, gross operating profit per available room has now fallen by 11.5 per cent to $83.61.

"Despite this, hoteliers are still maintaining a respectable 33.4 per cent profit conversion," said the HotStats report.

Cairo profits climb
Year-on-year profit per room at hotels in Cairo increased by 33.3 per cent in May, despite the city facing ongoing challenges to its business and leisure visitor profile.

The Egypt Air plane crash in May was the latest in a number of incidents which are likely to impact top line performance at hotels in Cairo, alongside the hijacking of an Egypt Air flight in March and challenging economic conditions following years of political turmoil.

However, the hotel market in Cairo remains buoyant, with hoteliers achieving a 30.7 per cent increase in RevPAR for the month as a result of growth in occupancy by 9.5 per cent and an increase in achieved average room rate by 13.9 per cent to $117.92.

Jeddah hotels
Hotels in Jeddah recorded a 47.6 per cent year-on-year uplift in profit per room in May as key events enabled hoteliers to leverage top line performance.

Events such as the FM Expo, Outdoor Design & Build Show and The Hotel Show enabled hoteliers in the Saudi capital to record a 10.8 percentage point uplift in occupancy and a 24.5 per cent increase in achieved average room rate, which contributed to a 42.9 per cent increase in total bed room revenues or RevPar.

Top line growth was fuelled by a 76.7 per cent increase in the achieved rate in the 'Other' segment to $454.49 this month from $257.15 during the same period in 2015. The segment accounted for 33.2 per cent of all revenue from the rooms department. This was in addition to the 22.1 per cent of rooms revenue derived from the residential conference segment.

- haseeb@khaleejtimes.com